OCC rejects FX investigation complaints: OCC has issued a final notice dealing with an appeal against a decision to reject a series of complaints in relation to the then FSA's handling of an investigation into fraudulent FX trading transactions. The Commissioner decided not to uphold the complaints:

  • against FSA's actions in relation to the FX companies with which the complainant had placed their money. The Commissioner found the FX firm was unregulated and the complainant produced no evidence to suggest that it was involved in any regulated activity. The firm also went into administration in 2008. As such, FSA was unable to take any action against it. Accordingly the Commissioner found (in agreement with the provisional decision reached earlier) that FSA had taken all reasonable steps to investigate the complainant's claims;
  • against FSA's actions in relation to the banks believed to have poorly administered client accounts held by the FX companies which enabled the companies to use client money for business expenses and allowed the accounts holding client money to become overdrawn. Considering all the information provided to FSA by the banks the Commissioner found FSA's response and conclusions were both rational and reasonable. As the issues raised were already historic, affected a small number of accounts and had been addressed by the banks in their responses to FSA's requests, no further action was justified; and
  • relating to the way in which FSA engaged with the complainant and its representatives during the course of investigations. The Commissioner found that FSA's decisions to refuse a request for a case conference and to disclose confidential information to the complainant for use in litigation were neither unreasonable or illogical.

The Commissioner sympathised with the complainant's frustrations with various authorities beyond the FSA and FCA and the complainant's lack of redress for the loss suffered. The Commissioner also acknowledged the validity of concerns raised by the complainant and their representatives that the reliance upon confidentiality provisions to justify the lack of an explicit and detailed rationale for the regulator’s decisions may enable banks and other regulated entities to mislead the regulator without challenge. The Commissioner assured the complainant that it would discuss with FCA as to whether there may be ways, in the future, of supplying some additional explanations to complainants without breaching the statutory requirements for confidentiality. (Source: Office of the Complaints Commissioner: Final Decision (FSA01525))